Archive for the ‘Government gone wild’ Category

Good reporting from Wirepoints, based on articles from Reason and Pro Publica, about the City of Chicago pushing low-income motorists into bankruptcy. These sources focus on the twin injustices of punitive ticketing and fines, and aggressive impoundment of innocent motorists’ cars. Of course parking restrictions, liability insurance requirements, and traffic rules need to be enforced, but it’s pretty clear that Chicago Police and other municipal actors see this as a source of revenue to pay their salaries and pensions, more than as an enforcement mechanism. The statistics imply a racist motive as well.

But that’s not the point. The point is, why do people with low incomes need to own cars? Why can’t they get where they need to go by transit? The answer, of course, is that in most affordable neighborhoods transit is sparse: Buses run slowly and infrequently, and quit early. Rail is only a bit faster, and most lines also lack 24-hour service. Relatively few jobs are reliably accessible within an hour, or even two hours travel time. And with the demise of neighborhood retail, cars are almost essential for shopping. Schools, libraries, other government facilities have large free parking lots even it they’re poorly-located for transit and pedestrian access. So of course people who can’t afford to own and operate automobiles find they’re compelled to have them.

This doesn’t justify the municipality stealing money and property from residents already living on the economic edge. It just makes it worse.

Matt Levine has an illuminating post about why the recent reduction in corporate tax rates results in a reduction in some corporations’ reported profits. It seems that past losses can be saved as a “deferred tax asset,” permitting a reduction in taxes to be paid in future years. But the ratio of losses to tax reduction declines when the tax rate declines, so the deferred tax asset is reduced. Levine notes that such tax rate reduction can cause a corporation to appear less well capitalized, since it reduces assets, even tho it increases expected after-tax income.

Just another illustration of the absurdity of a corporate income tax (or perhaps of corporations in general). Of course corporations should pay taxes – based on the land (including spectrum and other natural resources) that they claim. And they should pay additional taxes reflecting the limited liability granted by the state. But the accounting concept of corporate income has little to do with this.

Over at New City, Tony Fitzpatrick tells us how he survived a heart attack. The good news, of course, is that he did, and it seems to have been due to an aware spouse, responsive ambulance, and nearby hospital with skilled and dedicated staff. Except for the first, those are advantages of living in a more-or-less functional and prosperous city, with pretty decent emergency services, all of which is reflected in the cost of land.

But somehow, because before “ObamaCare” Tony’s pre-existing condition prevented him from getting insurance for medical expenses, he credits O’Care with his survival. As if, five years ago, there were no ambulances, no hospitals, or no medical staff. In 2010 an ambulance still would have come, he still would have been taken to the closest available hospital, and the staff still would have done their best for him. The only difference is that, afterwards, he would have gotten a big bill, even bigger than the bill he probably did (or will) get. He might have paid the bill, or worked out some payment plan, or had to sign up for some kind of public assistance. And very possibly the hospital would have written off part of the bill. (Either way, before or after O’Care, the hospital would have a considerable staff who spent their time negotiating payments, filling out forms, etc.)

It wasn’t Obamacare, Tony. It was living in a city with helpful people and pretty good medical services. Either way, we’re all paying for it.

And, yeah, somebody ought to make this comment on Tony’s article, but I can’t seem to get thru New City’s spam protection. Maybe someone else can.

We already knew that computers, equipped with proper algorithms, could write stories pretty much indistinguishable from the work of professional journalists working under deadline pressure. And had I been paying attention, I’d know that the company behind this, a “spinout” from Northwestern University, is also moving into other “turn data into a story” tasks, which from the examples here seem to mainly focus on financial reporting, tho it also appears that buyers of used cars can be exposed to “automated and individualized vehicle stories” (pdf) about their cars, which presumably helps sales. And it’s no secret that In Q Tel, an affiliate of your Central Intelligence Agency, is one of several investors behind the company.

So, it’s technology, it’s government, it’s marketing– why am I surprised that it’s protected by a bunch of patents on different variations on “automatic generation of a story?” Here I am, using a computer with many automatic functions to generate a sort of story about this company, and I really haven’t time to read and try to understand all their patents. I guess I better stop before I get in more trouble.

I am in no way qualified to review works of acknowledged fiction, as I read very few. But I have been intrigued by David Foster Wallace since a Radio National commentator observed that Wallace had, in his 1996 novel Infinite Jest, anticipated the effect of the Internet. When later I learned that his final, unfinished work, which had been assembled by his longtime editor, was about the administration of the U S Federal income tax, I couldn’t resist taking a look at it. I thought it might give some insight into how the IRS staff manage to actually patch together the mess of U S tax law and regulations to maintain something which provides the rulers with pretty good control as well as huge revenue, without causing any effective revolt by taxpayers.

No success there, I’m afraid, which is all the more disappointing because, in Chapter 9 Wallace breaks into whatever narrative structure the book has to say that, hey, here I am, a real person, and this book portrays real people and events modified only slightly. Then he points out that on the copyright page is the statement that “The characters and events in this book are fictitious. Any similarity to real persons, living or dead, is coincidental and not intended by the author,” which assertion necessarily applies to his statement that the book is not fiction.

Beyond that, the work is set in the 1980s, when the tax rules were simpler, with documentation and computerization far less than today. Which meant that a lot of people spent their days manually comparing sets of figures, on return after return, hour after hour, day after day. I suspect that in today’s IRS much of this work has been computerized, with the human staff devoting their time to other things perhaps too horrible to contemplate.

CTA railcar image by Menace of Privilege

Too, a lot of the book is just contrary to fact. The description of the Chicago public transportation system, to take one aspect of interest, is simply wrong. CTA do not operate any high-speed commuter trains, nor did they ever have a station named “Washington Square.” And it would be virtually impossible today for a passenger, with his arm stuck in the door of a crowded train, to be dragged along the platform to his death, because every railcar has long had a red handle, at every door, which any passenger could pull to open the door and stop the train (here’s why).

That said, there are some helpful insights about how the regime makes use of dullness:

[T]he whole subject of tax policy and administration is dull. Massively, spectacularly dull. It is impossible to overstate the importance of this feature. Consider, from the [Internal Revenue] Service’s perspective, the advantages of the dull, the arcane, the mind-numbingly complex. The IRS was one of the first government agencies to learn that such qualities help insulate them against public protest and political opposition, and that abstruse dullness is actually a much more effective shield than is secrecy. For the great disadvantage of secrecy is that it’s interesting (from page 83 in chapter 9)

And the key to success in a bureaucracy:

The underlying bureaucratic key is the ability to deal with boredom. To function effectively in an environment that precludes everything vital and human. To breathe, so to speak, without air.

The key is the ability, whether innate or conditioned, to find the other side of the rote, the picayune, the meaningless, the repetitive, the pointlessly complex. To be, in a word, unborable…

It is the key to modern life. If you are immune to boredom, there is literally nothing you cannot accomplish. (pp 437-438 in chapter 44)

In order to fund community needs from a tax on land value, assessors need to estimate what that land value is. Conceptually the task need not be difficult (Ted Gwartney outlines some options here, but a more complete and still-valid examination is in this book.) Basically, you look at sales prices for actual land transactions, and make adjustments for parcels which haven’t sold recently or where land comprises only a small part of the value. But what happens if the buyer pays something additional, “off the books,” for the land?

According to Peter Katz, that seems to be what often happens. This presentation at APA last March starts off slow (and self-promotional), but moves along thru some interesting territory. Regarding the price of vacant land, he asserts that, in many desirable areas, developers have to first buy (or option) the land, then negotiate with local authorities to get permission to build. Getting that permission might require agreeing to donate money (or land) for public use, or perhaps less savory expenditures, and to the developer this is part of the cost of land. If an area of any size is subject to such constraints, all the land sales are below market prices by the amount of such costs, and all sites, whether sold or not, receive assessed land values that are lower than what developers actually pay to get a buildable site. This results in less public revenue, implying a need for other taxes, as well as a tendency to develop at lower densities than might be appropriate, when developers choose to settle for existing zoning rather than what they might be able to negotiate. Katz suggests that a formal study of this effect should be done, and nominates Lincoln Institute to make it happen.

Katz’s remedy seems to be a combination of form-based zoning codes, plus a sophisticated (and presumably accurate) fiscal impact analysis that might show denser development to actually be more “profitable” to governments. But, responding to a question about 65 minutes into (and near the end of) his talk, he acknowledges that funding government from a land value tax would be a good way to obtain the desired development pattern, and that Henry George was a great guy. His observation that Georgists tend to be wacky has been made before, and I can’t say it’s wrong.

I am not going to call it “Obamacare” since most of it existed long before we’d heard of that guy, and I am not going to call it “health insurance” since it only applies to medical costs, which have just an approximate relationship to health, and it is not insurance since it is intended to pay routine costs rather than help pay for catastrophes. I suppose I might call it “diversion of productive people’s income to lobbyists and their clients” (which we might pronounce “DOPPILC”), but I’ll just call it “govcare” since it certainly involves the government and has something to do with care.

I really don’t understand it at all. Do we, the People of the United States, wish to pay whatever is necessary in order that all of us may have whatever medical treatment a group of licensed professionals assert is necessary? If so, why do we think it will not absorb 100% of our production beyond subsistence? If not, how do we decide priorities and set limits, when inevitably any limit is going to find someone very sick and very sympathy-arousing unable to afford some treatment which really would be helpful? (The answer probably has something to do with us the People of the United States behaving like adults, but if I was the very sick person in question I might have a different attitude.)

The subject is simply too big for me to comprehend, so I will just nibble around the edges. Today’s nibble is a message I received from the “health insurance” company who take a large part of my income.

Copayments do not apply to deductible or out of pocket.

Or, to put it a different way, if you purchase any considerable amount of medical treatment, what comes out of your pocket is likely to exceed the “out of pocket limit” that “your” “insurance” company proclaims. (This is in addition, of course, to the amount they already took from you to provide what they call “coverage.”

When the dinky suburb I live in decided to outsource the water bill processing to a firm six towns distant, I didn’t really object. Maybe it’s more efficient to have the work done elsewhere. But when the Cook County Assessor asked me to send a form to an address just outside the county boundary, I wonder what message he is trying to send.

If the earth belongs to the people, then whatever is paid for the use thereof belongs to them in some equitable fashion also. Therefore, beyond what’s needed for legitimate government purposes, there would seem to be enough for a considerable “citizen’s dividend” for everyone. Plenty of discussion on this subject can be found here.

My guess is that it would likely be enough to replace most of the aid programs which provide funds — rarely enough but maybe better than nothing — to low income people. One advantage is that it could be administered at relatively modest expense. A related advantage is that it can probably be made to work, with everyone getting what they’re entitled to. This latter aspect is what came to mind when I read this NY Times article, in which a Georgetown law professor summarizes “a litany of automation and contracting meltdowns” whereby the poor were unable to obtain benefits to which they were entitled under various aid programs and which may have been essential to their support.

His point seems to be that, while healthcare.gov suffered major problems initially, it was soon repaired because its failure affected many non-poor people. (I have no idea how well-repaired it might be, but will assume he is correct about this.) He does not mention the citizens dividend, perhaps is unaware of it, or maybe ignores it because it would likely reduce the demand for lawyers. But he makes the case. A regular check for everyone, as a just entitlement, would be a far simpler system than most of the means-tested (and otherwise-restricted) aid programs which cost taxpayers so much money.

And while we’re on the subject of means-tested programs, consider this:

[I]f a single mother has two children in childcare and she’s making $36,000, she’ll pay about $310 a month for childcare. Then, if she gets a raise to $37,000, she’ll need to pay $1,200 a month for childcare because of the loss of a subsidy.

Of course, it needn’t be a raise, it might just be a decision to work a bit of overtime. I have written about this before and I will probably have to write about it again. Means-tested aid is a disgrace.

After a couple of months’ diversions, I hope I am getting back to something like regular blogging, starting with a nice article — as far as it goes, at least– by Gregg Easterbrook about the subsidies and political favors governments provide for professional football. A lot of this, on stadium subsidies (not just for football), has been covered in the past by Heartland, most recently here (pdf). But Easterbrook covers some additional ground, noting the federal favors done for the football business. I hadn’t been aware that NFL has a special anti-trust exemption (I thought it was just one of the many many cases where feds choose not to enforce laws.) And I’d never made the connection between stadiums paid for by the public, and the “intellectual” “property” of football game images, which of course are government-created privilege.

Easterbrook does seem to be a football fan, which is a skill (affliction?) far beyond my capabilities. My preferred remedy for “sports” subsidies has always been for the audience to go away and do something else. But even tho I’m just as happy watching an amateur softball game, many people evidently get pleasure from seeing the professionals in action. Easterbrook suggests that it’s necessary that “public attitudes change.” Great idea, but as long as the public feel compelled to watch these games, it’s difficult to imagine any politician willing to risk the wrath of those who control them.